How to Know if Your Marketing Firm Is Giving You BS
Marketing is one of those areas that can suck up money faster than the latest Dyson vacuum cleaner. The whole process of getting and measuring results can be frustrating, so much so that your inclination might be to fire your marketing agency and find someone new--or even do it yourself. That's what Brian Signorelli did while working at a start-up with some business partners.
Right away, things seemed a bit off:
However, my business partners and I made it clear that our number one priority at the time was to generate sales leads, and we asked them to develop a plan for how they'd help us do that. But instead of focusing explicitly on lead generation, they encouraged us to build a Twitter presence, a Facebook business page, and drum up two or three good press releases announcing our company's launch. In the meantime, they would be pitching both local and national "rags" to get feature articles written about our company.
Four months later, the venture, which Signorelli doesn't describe, had 30 customers, but was unable to tie any of them back to the agency's activities. So he wrote a detailed set of business goals and the lead generation and conversion rates, lifetime customer values, and total number of new customers that would make the goals possible. There were detailed responsibilities for the company as well as the agency and timelines to achieve goals.
Three months and $70,000 after that, Signorelli and his partners fired the agency because they didn't see the necessary results. The agency did... but couldn't produce a report to prove its contribution.
Were Signorelli and partners right? Maybe. But there's also a good chance that they might not have been. There are significant challenges in working with a marketing or PR agency. Here are some things to consider:
Are you taking credit for what you didn't do?
In the first few months, the company received 30 customers but couldn't tie them back to what the agency did. But could Signorelli tie the customers back to what he and his partners did? If leads were coming in from people seeing PR, it's likely that the agency might have brought them in.
Do you track incoming business?
One of the most difficult practical areas for marketing is tracking where customers heard about a business. If salespeople closing deals don't ask where the person heard of the product, then it is impossible for an agency to track results. It is also impossible for the business to know whether it is effectively spending its money.
Are your plans realistic?
It is virtually impossible for any company to determine how aspects of its business will act without wading in and seeing. For example, stating what the lifetime value of customers will be before you're dealing with customers for an extended period of time is just wishful thinking. It is your pricing, the types of customers you can attract, the nature of what they buy, and the quality of service you offer, among other factors, that will determine lifetime value. Don't hold people to an arbitrary expectation. Marketing happens over time, and part of that time you should devote to better understanding how your business works in reality rather than theory.
What is your sales cycle?
Signorelli distrusts such ambiguous buzzwords as "brand presence," "go-to-market strategy," "microsite," "QR code," or "targeted campaign." And he's absolutely right that many marketing people will offer all manner of toe-tapping terms because they don't want to get pegged to hard expectations. At the same time, it's also true that you have to get a lot of people to know about your company to build a sales funnel. That not only takes time, but might require such hazy concepts as brand awareness and repeated impressions. Don't expect sales faster than they can be brought in.
Should you vest absolute trust in a marketing agency? Oh, good heavens, no. But you'd also better know what you need to do to see if a marketing person is the problem, or if you have a bigger issue that blame won't solve.
ERIK SHERMAN | Columnist
Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.